TOKYO A decision by Japanese Prime Minister Shinzo Abe not to proceed with a planned sales tax hike next year would be tantamount to admitting that his "Abenomics" recipe for economic revival was a failure, the No. 2 leader of the main opposition Democratic Party said on Tuesday.
The Finance Ministry, the Bank of Japan and major corporations want Abe to raise the tax to 10 percent in October 2015 as planned to keep Japan's promise of reducing the biggest debt burden in the industrial world.
But recovery in the world's third-biggest economy is struggling, Abe's popularity has been dented by two cabinet ministers' resigning over political scandals, the U.S. Treasury Department is pushing Tokyo not to go too fast on budget-balancing, and Abe's party faces tough local polls next April.
"If they don't raise the sales tax while continuing to say Abenomics is a success, that would be the worst," Democratic Party of Japan Secretary-General Yukio Edano told Reuters in an interview. "Both the fiscal situation and the economy would worsen."
Asked if postponing the tax hike would be the same as declaring Abenomics a failure, he said: "We think so."
(Reporting by Linda Sieg and Hitoshi Ishida; Editing by Chang-Ran Kim)